8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 26, 2012

CTI INDUSTRIES CORPORATION

(Exact name of registrant as specified in its charter)

Illinois	0-23115	36-2848943
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

22160 North Pepper Road, Lake Barrington, IL	60010
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (847) 382-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item No. 2.02 – Results of Operations and Financial Condition

On March 26, 2012, CTI Industries Corporation issued a press release reporting earnings and other financial results for its three and twelve month periods ended December 31, 2011. A copy of the Press Release is attached as Exhibit 99.1.

The information disclosed under this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for the purposes of Section 18, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item No. 9.01 – Financial Statements and Exhibits

(c) Exhibits:

Exhibit No.	Exhibit
99.1*	Press Release dated March 26, 2012, captioned: “CTI Industries Corporation Reports Results for Full Year and Fourth Quarter 2011.”

*Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CTI Industries Corporation
		(Registrant)
Date: March 26, 2012	By:	/s/ Howard W. Schwan
		Howard W. Schwan, President

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

FOR FURTHER INFORMATION CONTACT:

Stephen M. Merrick
Executive Vice President	Investor Relations
(847) 382-1000	(847) 620-1330

CTI Industries Corporation Reports

Results for Full Year and Fourth Quarter 2011

FOR IMMEDIATE RELEASE

March 26, 2012

BARRINGTON, IL, March 26, 2012 — CTI Industries Corporation (NASDAQ Capital Market), a manufacturer and marketer of novelty balloons, printed and laminated films and flexible packaging and storage products, today announced its full-year results of operations for 2011, as well as for the three months ended December 31, 2011.

Year-End Results

For the year ended December 31, 2011, consolidated net sales totaled $47,171,000, compared to consolidated net sales of $47,748,000 for the year ended December 31, 2010, a decrease of 1%. For the year, CTI achieved net income of $484,000 or $0.15 per share (basic and diluted), compared to $1,828,000 or $0.61 per share (basic) and $0.60 (diluted) for 2010.

Fourth Quarter Results

Consolidated net sales for the fourth quarter of 2011 were $10,778,000 compared to consolidated net sales of $11,701,000 for the fourth quarter of 2010, a decrease of 8%. For the fourth quarter of 2011, CTI had net income of $155,000, compared to net income of $379,000 for the fourth quarter of 2010 a decrease of 59%. Earnings per share for the fourth quarter of 2011 were $0.05 (basic and diluted), compared to $0.12 (basic and diluted) for the same period of 2010.

Key Factors and Trends

2011 was another successful year for CTI. Sales were just below the highest levels recorded in CTI’s 35 year history. The robust sales were driven by a 20% increase in sales of our latex novelty items. The bottom line was affected principally by two factors (i) a significant increase in raw materials costs, particularly for latex and (ii) an increase in the effective tax rate for the Company due to the depletion of a tax valuation allowance available in prior years. Absent these two factors, net income for 2011 would have been higher than the record amount recorded last year.

Gross margin levels dropped in large part to the increase in raw materials costs, particularly latex, from 22.2% in 2010 to 19.5% in 2011. Total cost of raw materials increased in 2011 to 47% of sales compared to 45% of sales in 2010. In the fourth quarter, the effect of raw materials prices began to moderate and gross margin levels increased to 21.7% for the quarter.

Fourth quarter results were also affected by sales, marketing and administrative costs associated with the development of a new product line introduced in the 2012 and the development of new customers in the U.S. and Europe.

During 2011, CTI’s office and warehouse in Germany made great strides by establishing relationships with select retail chains and has begun shipments of novelty products in mainland Europe with targeted customers. During the year, CTI’s Mexican subsidiary increased its production capacity and flexibility by utilizing new production equipment.

CTI generated over $800,000 in cash flow from operations and reduced long term indebtedness by over $500,000. The Company’s working capital balance increased to over $5 million.

CTI Industries Corporation, based in suburban Chicago, designs, develops, produces and markets a line of novelty balloon products, laminated and printed films for packaging applications and flexible packaging and storage products.

Statements made in this release that are not historical facts are “forward-looking” statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties and are subject to change at any time. These “forward-looking” statements may include, but are not limited to, statements containing words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “goal,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar expressions. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. More information on factors that could affect CTI’s business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

– FINANCIAL HIGHLIGHTS FOLLOW –

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CTI Industries Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	December 31, 2011			December 31, 2010
ASSETS
Current assets:
Cash	$	338,523		$	761,874
Accounts receivable, (less allowance for doubtful accounts of $70,000 and $59,000 respectively)		7,091,194			8,533,626
Inventories, net		13,338,317			10,368,037
Net deferred income tax asset		760,241			750,485
Prepaid expenses and other current assets		1,772,694			1,012,067
Total current assets		23,300,969			21,426,089
Total property, plant and equipment, net		8,843,909			9,659,768
Total other assets		1,470,644			1,775,531
TOTAL ASSETS	$	33,615,522		$	32,861,388
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities	$	17,688,994		$	17,952,042
Total long-term liabilities, less current maturities		4,171,033			3,129,685
Total Liabilities		21,860,027			21,081,727
Total CTI Industries Corporation stockholders' equity		11,860,768			11,784,340
Noncontrolling Interest		(105,273	)		(4,679	)
Total Equity		11,755,495			11,779,661
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	33,615,522		$	32,861,388

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CTI Industries Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

	Year ended December 31,						Three months ended December 31,
	2011			2010			2011			2010
Net sales	$	47,171,498		$	47,747,611		$	10,778,107		$	11,700,684
Cost of sales		37,965,245			37,145,439			8,381,984			9,265,322
Gross profit		9,206,253			10,602,172			2,396,123			2,435,362
Operating expenses:
General and administrative		5,278,507			4,921,457			1,303,511			1,113,939
Selling		910,882			914,698			256,350			243,369
Advertising and marketing		1,579,162			1,719,509			470,230			389,985
Total operating expenses		7,768,551			7,555,664			2,030,091			1,747,293
Income from operations		1,437,702			3,046,508			366,032			688,069
Other (expense) income:
Interest expense		(773,111	)		(919,170	)		(171,269	)		(219,363	)
Other		38,169			(31,382	)		3,272			5,966
Total other expense		(734,942	)		(950,552	)		(167,997	)		(213,397	)
Income before income taxes and noncontrolling interest		702,760			2,095,956			198,035			474,672
Income tax expense		319,444			342,688			65,636			134,426
Net Income		383,316			1,753,268			132,399			340,246
Less: Net loss attributable to noncontrolling interest		(100,594	)		(74,250	)		(22,928	)		(38,334	)
Net income attributable to CTI Industries Corporation	$	483,910		$	1,827,518		$	155,327		$	378,580
Income applicable to common shares	$	483,910		$	1,827,518		$	155,327		$	378,580
Basic income per common share	$	0.15		$	0.61		$	0.05		$	0.12
Diluted income per common share	$	0.15		$	0.60		$	0.05		$	0.12
Weighted average number of shares and equivalent shares of common stock outstanding:
Basic		3,138,958			2,981,188			3,141,261			3,130,862
Diluted		3,181,102			3,039,442			3,180,143			3,205,154

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